Freeport Indonesia, a key copper miner, has cautioned the Indonesian government about the potential loss of $2 billion in revenues for Jakarta if the planned ban on copper concentrate exports in June is enforced, as disclosed by a company official on Thursday. Indonesia’s upcoming export prohibition aims to incentivize miners to invest in local smelting facilities, thereby enhancing product value and export earnings. Freeport Indonesia, under the umbrella of mining giant Freeport McMoran, has urged for flexibility in the ban’s implementation, citing operational constraints at its Gresik smelter, which is not expected to reach full capacity by June.
Chief Executive Tony Wenas highlighted the significant revenue impact of the ban, emphasizing the financial implications at current price levels. Following discussions with President Joko Widodo, Freeport reiterated its commitment to completing the Gresik smelter construction by May and commencing operations in the subsequent month, with full capacity anticipated later in 2024. The Indonesian mining ministry declined to comment on the matter.
President Widodo aims to conclude negotiations with Freeport by June, particularly focusing on finalizing regulations related to mining permit extensions. Freeport has raised concerns about potential ore production cuts if the ban is not postponed, aligning with other industry players like Amman Mineral Internasional, which is seeking relaxation due to smelter readiness issues. Discussions also encompassed extending Freeport’s mining permit beyond 2041, with ongoing negotiations reflecting efforts to address operational challenges and regulatory requirements for sustainable mining practices.